Greater New Orleans

Between the flow of BP's oil and BP's money: John Maginnis

The fifth anniversary of Katrina comes at a pivotal time in the saga of the Gulf spill disaster: after the flow of oil has stopped and before the flow of money begins. As the state takes stock of its post-hurricane recovery, it also needs to set the course and pace of its next recovery.

While the two disasters cannot be compared, there are hopeful signs that the oil-spill recovery is off to a better start than the post-K experience. A good example is this week's handoff of claims payouts from BP to presidential designee Ken Feinberg, the plainspoken New Englander who earned his stripes administering the claims of 9/11 victims. He has made a bold promise to cut checks for individuals and businesses within a day to a week of claims being filed, and to make six-month advance payments instead of BP's month-to-month grind.

Last week, BP came through with grants to the state of $15 million for mental health services and $13 million for seafood testing. The latter is a small fraction of Gov. Bobby Jindal's request of $173 million for a three-year monitoring and marketing program to restore the tarnished image of Gulf seafood. He nonetheless thanked the company for taking the "first step," and now needs to stay on its heels to get more.

The federal government still has a major role to play, and the best way to start is to stop doing harm by lifting the drilling moratorium. National polls, even one recently out of Florida, show majority support for resuming oil exploration. Vague signals from the administration suggest the moratorium will end before its Nov. 30 expiration, but there is no telling when.

The next best news will come when Navy Secretary Ray Mabus, the president's point man on Gulf recovery, releases his short-term recommendations for the region. The Jindal administration's wish list includes 18 large-scale coastal restoration projects that have been vetted by the Corps of Engineers and authorized by Congress but never funded with appropriations.

Mabus also took input from economic development groups in the coastal states, including Louisiana's Committee of 100, which urged using cash grants and GO Zone-type loans for the seafood and tourism industries. Beyond what these businesses collect from BP, federal incentives would help them rebuild for next year's season.

To pay for the above, Congress will soon consider levying fines on BP under the Clean Water Act, which, at about 5 million barrels spilled, could start at $5 billion and go higher. Sen. Mary Landrieu has requested that 80 percent of fine revenue be returned to the affected states, which the White House has agreed to in principle but not to a specific amount.

Justice would be served to use BP fines to pay for coastal restoration projects and business development, but congressional budget-scoring rules make a simple swap difficult. Yet when Congress wants to spend money, it finds a way. To lay a few billion dollars on the coast would take a bipartisan consensus that has been lacking on Capitol Hill recently, but this could be the right cause.

Once fined, BP will still be on the hook to the state in court. Much of what Louisiana stands to recover will come through the Natural Resources Damage Assessment process, which, somehow, will arrive at a dollar value on oiled marsh and dead sea turtles. That could take years if BP wants to drag it out. It may be in the oil giant's interest, however, to get the legal and public relations nightmare behind it by arriving at a timely settlement.

Whatever the final figure on damages, it too could and should go into projects to restore and protect the coast. If so, from the fines and the lawsuit could flow a stream of billions, which would represent the largest, most concentrated investment in the coast since when we started counting the football fields of marsh washing away by the hour.

Given all that was lost, starting with 11 lives, BP cannot make whole again what it destroyed. But if the state makes its case, in court and in Congress, and invests its awards and appropriations wisely, the fifth anniversary of this catastrophe might focus on its silver lining.

John Maginnis is an independent journalist covering Louisiana politics. He can be contacted at www.LaPolitics.com.